Cost of transferred property
 7. (1) The following property shall be deemed to be acquired by a municipal electricity utility on October 1, 2001 at a cost equal to the fair market value of the property on that date: 1. Property that is transferred to the utility under a transfer by-law. 2. Property that is acquired by the utility before October 1, 2001 but after any property is transferred to the utility under a transfer by-law.  O. Reg. 162/01, s. 7 (1). (2) In determining the fair market value of property referred to in subsection (1), (4) or (6), a municipal electricity utility shall use a valuation method, (a) that is generally accepted as a reasonable method for determining the fair market value of the particular type of property; and (b) that is acceptable to the Minister of Finance.  O. Reg. 162/01, s. 7 (2); O. Reg. 172/02, s. 1 (1). (3) If a transferor transfers property to a municipal electricity utility under a transfer by-law and if the utility describes the transferred property as falling within Class 24 or 27 of Schedule II to the Federal Regulations immediately before the transfer, the transferred property shall be deemed to be property in the same class after the transfer if the following conditions are satisfied: 1. The transferor acquired the property before 1999. 2. The Minister of Finance is satisfied that the primary use of the property by the utility is the prevention, reduction or elimination of pollution.  O. Reg. 162/01, s. 7 (3). (4) Despite subsection (1), if all of the conditions set out in subsection (5) are satisfied, each property that is transferred under a transfer by-law to a municipal electricity utility from a person (as defined in subsection 85 (1) of the Act) shall be deemed, (a) to have been acquired by the utility from the person at the time the person last acquired the property; (b) to have been acquired by the utility at a cost equal to the fair market value of the property on October 1, 2001; and (c) to have been acquired by the utility from a person with whom the utility was not dealing at arm’s length.  O. Reg. 172/02, s. 1 (2). (5) The following are the conditions referred to in subsection (4): 1. The utility must elect to have subsection (4) apply with respect to all the property described in subsection (4). 2. The election must be made in the form approved by the Minister. 3. The election must be made in the return filed by the utility under section 13 for the taxation year, if any, commencing on October 1, 2001. 4. For the purpose of calculating the amount payable by the utility under section 93 of the Act for the taxation year, if any, commencing on October 1, 2001 and for each subsequent taxation year, the utility must apply subsection 1102 (14) of the Federal Regulations in respect of all the property described in subsection (4), unless the utility opts not to apply subsection 1102 (14) and the Minister is satisfied that the non-application of subsection 1102 (14) would not result in a decrease in the amount otherwise payable under section 93 of the Act.  O. Reg. 172/02, s. 1 (2). (6) Despite subsection (1), if all of the conditions set out in subsection (7) are satisfied, each property that is transferred to a municipal electricity utility from a person (as defined in subsection 85 (1) of the Act) who, at the time of the transfer, is a municipal corporation formed as a result of a statutory municipal amalgamation of two or more predecessor municipal corporations shall be deemed, (a) to have been acquired by the utility from the predecessor municipal corporation that owned the property immediately before the statutory municipal amalgamation; (b)  to have been acquired by the utility at the time that the predecessor municipal corporation last acquired the property before the statutory municipal amalgamation; (c) to have been acquired by the utility at a cost equal to the fair market value of the property on October 1, 2001; and (d) to have been acquired by the utility from a person with whom the utility was not dealing at arm’s length.  O. Reg. 172/02, s. 1 (2). (7) The following are the conditions referred to in subsection (6): 1. The property must have been owned by one of the predecessor municipal corporations immediately before the statutory municipal amalgamation. 2.  The utility must elect to have subsection (6) apply with respect to all the property described in subsection (6) and does not elect to have subsection (4) apply with respect to the property. 3. The election must be made in the form approved by the Minister. 4. The election must be made in the return filed by the utility under section 13 for the taxation year, if any, commencing on October 1, 2001. 5. For the purpose of calculating the amount payable by the utility under section 93 of the Act for the taxation year, if any, commencing on October 1, 2001 and for each subsequent taxation year, the utility must apply subsection 1102 (14) of the Federal Regulations in respect of all the property described in subsection (6), unless the utility opts not to apply subsection 1102 (14) and the Minister is satisfied that the non-application of subsection 1102 (14) would not result in a decrease in the amount otherwise payable under section 93 of the Act.  O. Reg. 172/02, s. 1 (2). (8) In subsections (6) and (7), “statutory municipal amalgamation” means, in relation to two or more municipal corporations, an amalgamation which is required by an Act or is otherwise required by law.  O. Reg. 172/02, s. 1 (2). (9) An election referred to in subsection (5) or (7) is effective for the first taxation year of the utility, if any, commencing on October 1, 2001 and for all subsequent taxation years.  O. Reg. 172/02, s. 1 (2). (10) A utility cannot revoke an election referred to in subsection (5) or (7) unless the utility has the consent of the Minister of Finance to do so.  O. Reg. 172/02, s. 1 (2).